Trump is looking to consolidate his populist base without challenging corporate power: Sam Gindin tells ILNA

Sam Gindin is a Canadian intellectual and activist known for his expertise on the labour movement and the economics of the automobile industry. Gindin's writings have focused on the Canadian Auto Workers, the auto industry, the crisis in organized labour in Canada and the US, and the political economy of capitalism. Below is ILNA's interview with this distinguished activist and intellectual on Donlad Trump's tariff campaign.

ILNA: During his second presidential term, Trump raised tariffs to an unprecedented level. In your view, are Trump’s tariff policies driven more by economic considerations or political motives?

Trump is looking to consolidate his populist base without challenging corporate power or addressing inequalities. The “external” sector offers a way of doing this. Cut immigration appeals to American nativism and resentments about the alleged economic costs of immigrants. And raise tariffs to generate revenues from abroad, protect the domestic market, and pressure capital to invest in the U.S. So it is political but based on economic assumptions that ignore the pluses for America of low-cost labour from abroad and mistakenly believe that tariffs are a market-driven intervention that can substitute for a larger industrial strategy that includes interventions that challenge corporate leadership. 

ILNA: To what extent do broad tariffs on imported goods genuinely contribute to bringing investment and industrial production back to U.S. soil, and what costs do they impose on American consumers in return? Also, some critics argue that tariffs are essentially a “hidden tax” on the middle class and workers. In your view, what effects do these tariffs have on inflation and purchasing power in the United States?

In a larger context, such as countries trying to generate egalitarian development rather than competing for investment, tariffs have a role to play. On their own, however, they are a tax on consumers and business (even business importing from their own operations abroad) that will raise prices. Moreover, the tariff revenues are not going to improve social programs but to cut taxes on the super-rich.

As for bringing investment and jobs back to the US, in the immediate term this is unlikely because Trump’s erratic on-again, off-again tariffs have created uncertainty about both where trade rules are going and the possibility of a recession. In the mid-term, Trump may be able to shift the benefits and costs of trade in favor of the US in some sectors in regards to some countries, e.g. the Canadian auto industry is very integrated into the US and may move new investments to the US to minimize disruptions. On the other hand, imposing high tariffs on China will only shift imports to other low-wage regions with no positive impact on jobs only higher prices.

In the longer-term – which will come sooner than later – Trump’s bullying use of tariffs and explicit turn to “America first” weakens its alliances, is economically irrational, and threatens to weaken and even risk the future of the American Empire. This raises the question of capital’s reaction: having gotten Trump’s goodies, will they actively resist his trade policy when it undermines the imperial role of the US that has served them so well?

ILNA: At the international level, how have U.S. tariff policies affected global supply chains? Are we witnessing a redirection of investment and production to third countries, or merely a rise in overall costs?

It is too early to tell since investment decisions take a while to unfold and many such decisions are waiting to see how things unfold. It makes little sense to make major strategic shifts if, after gaining some concessions internationally, either returns things to normal or is defeated by the Democrats and they at least partially revert to the old status quo.

Nevertheless, we are seeing clear hints of changes: less exports from China, more from the rest of SE Asia; allies feeling alienated by Trump’s overtly America-first actions; Third-world links to China growing; American companies like Amazon and Walmart warning of both inflation and supply-side disruptions; Trump’s reversal of attacks on immigrant farm-workers because of the food lobby’s warnings of supply shortages and increases in the price of food.

ILNA: The U.S.–China trade war has now entered a new phase. In your opinion, which side holds the upper hand economically and geopolitically, and can this conflict be managed in a sustainable way? Moreover, do you think Trump can achieve his intended outcome from these tensions?

It is important to recognize that China is not looking to replace American leadership. What it wants is for the American state to act as a reliable world leader so it can move on with its own development. The bind for the US is that it wants to contain China but, unlike the Soviet Union of old China is inside global capitalism and the US does not want to decouple from China – its market and supply networks are too valuable for US business.

US sanctions and tariffs have not worked in containing China; they have only led to China acting to shift its exports to other countries and emphasize internal markets more. The same goes for the military competition. American aggressiveness has only pushed China to accelerate its military readiness.

China, unlike other countries, may not have an interest in replacing the American Empire but it is determined to maintain its autonomy. The outcome may be a fracturing of global capitalism into partially separate spheres or some accommodation whereby China opens its high tech and financial markets up more (i.e. a deepening of globalization), and there is some agreement on military co-existence (akin to the American-Soviet peace agreements). But all this is fraught and uncertain. How and whether this can be resolved is one of the most important geopolitical questions before us.

ILNA: Given the imposition of steep tariffs on India, has the United States risked losing a strategic partner in Asia? In this context, how might China benefit from the rift between Washington and New Delhi?

Trump’s erratic actions have alienated allies.  In the case of India, India has little choice but to explore closer relations with China, if only as a bargaining lever with Trump.  But India will want to retain its balancing act between the US and alternative relations like Russia or China. So, after bullying India, it would not be a surprise if Trump found some accommodation.

And again, Trumpism isn’t forever. There are no calls from American elites to break with India and if Trump is defeated electorally, a return to normal with India would be in the cards. Though even then the example of the dangers of over-dependence on the US might be expected to see the emergence of a more wary India.

ILNA: Europe and Canada are also embroiled in tariff disputes with Washington. Will this trajectory erode trust between the U.S. and its traditional allies, or is a behind-the-scenes compromise more likely in the end?

Trump has certainly eroded trust and there is a delegitimation of American leadership throughout the world. But “delegitimation” does not necessarily lead to material change. The extent of the economic and military dependence of Europe and Canada on the US, and the reality that delinking from the US and the radical restructuring this implies might put socialism – or at least radical economic interventions on the agenda – suggests that Europe and especially Canada are desperate for some resolution as they wait for Trump’s defeat and a return to the American Empire of yesteryear.

So yes, I expect European and Canadian governments, very much reinforced by their domestic capitalist classes to pressure their states for compromises. The main reason for a conservative outcome is the absence of an organized left with the capacity to act on the openings created by Trump exposing the nature of the American Empire. 

ILNA: From a legal and institutional perspective, how much has America’s repeated reliance on tariffs weakened the multilateral trading order, and what future do you foresee for the global free trade regime?

There were already cracks in the world order that went beyond Trump such as the failures of the WTO, the limits of the International Criminal Court, the bi-partisan support for the tariffs imposed on China. Trump’s unilateralism has certainly weakened the allegedly multilateral trading order. But globalization and the empire stumble on and what is not clear yet is: Will Trump’s declining authority within the US and concerns from American business lead him to reverse course? If the Democrats return to power, how much of Trump’s damage to the global trading order will be “corrected”?

But the more important question for socialists is our own marginalization in such debates. Our goal is obviously not to return to the American Empire as it was.  Nor should we expect that inter-imperial rivalry will do much of the heavy lifting for us. And we should be careful of seeing the collapse of the American Empire as inherently good. Absent a left movement and left alternative, the decline of the American Empire is just as likely to increase nationalism and its dangers, from naïve working-class alliances with their own bourgeoisies to devastating wars.

ILNA: Some analysts argue that Trump’s tariff pressures are effectively pushing countries toward parallel alliances and trade blocs. Are we witnessing the emergence of a “multipolar trading world”?

We need to be clear on what “multipolar” means.  Alliances like the BRICS are not another pole in any serious way; their economic ties to the US and NATO are far stronger than their ties to each other. Regional ties may become stronger but they can still remain part of the American-led world order. For example, neither the development of the European region nor the US-Canada-Mexico trade agreements are threats to globalization and a Middle Eastern bloc that included Israel would ease tensions in that region and strengthen American-led globalization, not undermine it.

In the case of a new Asian block, this is an open question. Trump’s bullying is more likely to lead to such a development, but it is important to remember that a) Asia includes close and important US allies like Japan, South Korea and Vietnam; and b) even if other countries are pushed to strengthen ties to China, many of them as wary of China’s dominance as American dominance and would at most be looking to balance their dependencies.

We are in a state of flux in global economic and political relationships. We should not rush to project this into a fracturing of global capitalism or loss of American dominance even if modifications in the American Empire are occurring. On the other hand, neither can we assume the status quo is forever fixed. But one of the factors we must add to all these discussions is where left movements from below might come to play a role – not just in the US but everywhere, including China. 

Interview by: Amir Mehravar